Skip to comments.Is the new Amazon Kindle Fire an iPad killer? Yes. It's the price, stupid
Posted on 09/28/2011 1:24:11 PM PDT by SeekAndFind
The company's new Kindle Fire tablet, a 7-inch touch-screen device powered by Amazon's content ecosystem and priced at just $199, may be an orange to Apple's iPad apple, but I'd argue that it's an iPad killer all the same.
On paper, the Kindle Fire has half the features of the iPad. In fact, it's almost literally half the features--here's a handy comparison chart so you can see for yourself. There's no camera, front or rear; the 8GB of onboard storage is half the amount of the base-model iPad; the Fire has no cellular options, no built-in GPS, and no Bluetooth, as the iPad does. The software options compared to the iPad are minimal, and the app library for Android still isn't nearly as robust as the iOS app library. All true facts. Doesn't matter.
There may be more strikes against the Kindle Fire, too: Amazon hasn't explicitly denied that it will block access to competing content-delivery apps like Hulu, Netflix, or any upstart e-bookstores that might want to be on the Fire, but I'd be surprised if you ever find them there. Amazon has taken a closed, proprietary approach with the Kindle line, and I think it's more than a safe bet to say that this won't be the "open" Android tablet experience you've been hearing about with the Galaxy Tabs or the Xooms of the world. Not even close, in fact.
And then, of course, there's the fact that the Kindle Fire is a 7-inch tablet in a 10-inch tablet world. All previous 7-inch competitors, from the original Galaxy Tab to the poor, doomed PlayBook have fallen by the wayside--while Steve Jobs personally mocked them as "dead on arrival", and once gruesomely suggested you'd have to file down your fingers to live with one.
Again, all true facts about the Kindle Fire, none of which matter. In these troubled times, and possibly even before, you need look no further than the $99 TouchPad buying frenzy for the lesson of the tablet market (and maybe every other electronics market, ultimately): it's the price, stupid.
At $199, virtually any mainstream consumer is going to stand next to these two devices, look at them side-by-side, and make a price-conscious decision--and that decision is easier than you might think, as tablet usage starts to sort itself out. Sure, the Kindle Fire lacks a camera for video chat and movie-making. So what? Hardly anyone is doing that with their tablets anyway. No GPS? That's what your phone is for. No Bluetooth? Shrug. It's one hundred and ninety-nine dollars.
The iPad, in even sideways competition with a Kindle Fire, faces the same problem it's always had, but it's a bigger problem now. The problem is that hardly anyone actually needs an iPad. And as tablet usage starts to shake out, it's more and more apparent that a low-cost option with fewer features will actually suit most people's first-world needs. According to a recent Citigroup survey, the vast majority of tablet users use these devices primarily for lightweight entertainment: mostly casual gaming, Web browsing, e-mail, and, increasingly, e-books.
Fully half of tablet users are streaming video. We're also traveling with them like crazy, which means throwing them in bags; taking them to restaurants, which means exposing them to foodstuffs of all sorts; and giving them to our kids, which means, well, you know. Also, 35 percent of respondents to a Staples survey said they use their tablets in the bathroom. I'm just saying, wouldn't you rather that be a $199 tablet than a $500 tablet?
In my opinion, Amazon has kicked off more than a price war, here. It's unquestionably slaughtered every Android tablet on the market, and it's set up a showdown with the iPad that doesn't have to be feature for feature. If anything, Amazon has done what Apple did with the iPad in the first place: create an entirely new market. And the timing simply couldn't be better.
Data point from one of our users: you can actually buy the entire new ad-subsidized Kindle lineup for less than the cost of a 32GB iPad.
At $199, virtually any mainstream consumer is going to stand next to these two devices, look at them side-by-side, and make a price-conscious decision—and that decision is easier than you might think, as tablet usage starts to sort itself out. Sure, the Kindle Fire lacks a camera for video chat and movie-making. So what? Hardly anyone is doing that with their tablets anyway. No GPS? That’s what your phone is for. No Bluetooth? Shrug. It’s one hundred and ninety-nine dollars.
In a year from now - when the iPad 4 has bluetooth, camera and more. And sells for $199?
Then I’ll buy one. Maybe.
still is in my house...
I miss those ‘clacker’ keyboards.
There's a special sensor. If you ever use it in the bathroom, the device becomes flagged and you won't be able to return it to the store.
“There’s a special sensor. If you ever use it in the bathroom, the device becomes flagged and you won’t be able to return it to the store.”
Kind of like George Kostanza trying to return his “tainted” book.
That’s a lot fancier than what I remember.
if apple drops their price by 200bucks, they will be ok.
I can’t get used to the new stuff that feels like they have sponges under the keys.
“and possibly even before, you need look no further than the $99 TouchPad buying frenzy for the lesson of the tablet market (and maybe every other electronics market, ultimately): it’s the price, stupid.”
Heh, I thought that Apple was guaranteed to win. You mean they lied?
I remember the IBM PCjr with its original 'chicklet' keyboard similar to the original Commodore - too nauseating for words.
So in reference to the "Kindle Fire" to the "iPad 2", I think that I am seeing much the same pattern. The Kindle is a successful product as is the iPad but I don't see the same for this junior tablet that draws from an enormously smaller "app workplace". In this horse race I will still ride the iPad although I am waiting for the iPad 3.
If price were the ‘be-all’ then there wouldn’t be a market for the Mac, the iPhone or the iPod. People will pay for a quality product, and a quality experience. Always have, always will.
Now, I do think the kFire will be a popular seller - and as Gene Munster of Piper Jaffray is saying today “not a true competitor, but a more competitive than expected” and “Amazon is likely losing $50 on each unit it sells”.
So, how much marketshare can Amazon afford to buy? Meanwhile, Apple is showing several hundred dollars of profit on each unit it sells (ifixyour.com estimates the BOM on the 64 Gig wi-fi iPad at less than $280; it retails for $599).
Upside-great functionality, great price, nice looking.
Downside - small screen (only 7 inch), 7.5hr batter-life with video playback; less with wi-fi.
One important difference is the kFire line-up is a media consuming (zero productivity) suite; while the iPad can perform both tasks.
A friend who is a huge Apple fan and always has been got an iPad a few months ago. He says it’s too big to really be much more portable than an apple laptop and really just good for entertainment type stuff. He doesn’t think it’s worth the money. I have to admit that 7” is a great size for portability while still getting movies and games at a good size and resolution. It’s a good portability “sweet spot”.
The article makes some very valid points about what features you are paying for vs what features you actually use.
I think they are doing just fine. Also, bear in mind that Apple is making several hundred dollars profit on each iPad, while Amazon is losing $50 on each kFire they sell, according to Piper Jaffray analyst Gene Munster.
I can't tell whether you're joking or not, but given the fondness that companies like Facebook and Google have for spying, I wouldn't rule it out.
Any idea if these devices have USB and HDMI ports?
I like it. But unless I can get a 3g/4g version or I am able to use my USB 4g card, I can’t use it.
“Fully half of tablet users are streaming video. We’re also traveling with them like crazy”
Hence he misses the key point of the iPad: ANYWHERE, ANYTIME.
a HUGE mistake for leaving off the camera
... and a keyboard, and a DVD drive with Lightscribe.
—Any idea if these devices have USB and HDMI ports?—
USB is so standard now that if they didn’t have it, they would not be of any value whatsoever. HDMI less so. But it would be a nice feature and add significant value.
I’ll read Walt Mossberg’s review before deciding.
Question: do these things require contracts (along with monthly fees) with wireless providers?
Still have one of those, a Commodore 64, Amiga 1000, IBM 8088, and a host of other useless, but can’t throw away relics.
for a 7” tablet / pad, the goal price should be $50.
it is all a matter of mass production.
remember the early calculators?
remember the early digital watches?
we need a texas instraments determination to shrink the price.
My Android phone (HTC Evo 4G) has an HDMI port, and it is indeed nice to hook up to the big TV. I can play stuff from TV.com on there, which is quite nice.
The BOM on the calculator supported the price structure you are talking about.
However, the cost of LCD display, touch-screen front, the multi-core chipsets involved, 1 Gig of RAM, SDRAM, as well as the wi-fi/Bluetooth/GPS/solid state gyro-scopes and accelerometers are well beyond that price point. As-is, Amazon is predicted to be selling each kFire at a $50 loss.
Apple could conceively drop them $200 and still make a $100 profit on the iPads; but why would they? They are selling far, far more than any ‘expert’ predicted.
Remember just over a year ago they were predicted to be a total and complete flop? I think that Amazon needs to re-think their strategy, because it’s never a good idea to buy marketshare. Ask HP/Dell how buying marketshare has worked for them.
It should be free if they gear it toward all paid content (or advertising subsidised content).
USB 2.0 port, no HDMI listed on the spec page.
LMAO....I was the fool that bought one of thse Osbornes. That along with the first gen cell phone that I had.....but you know....sometime ya just gotta have it :)
Was a real computer!
The goal, yes, but the reality is such that today an iPad, for example, costs Apple almost $300 to manufacture, so what are you going to do? (There have been pretty detailed breakdowns of the costs published in the press.)
Had one of these :)
It won’t be long at all before Google launches one using Android. Microsoft has got to be very close (they are in the hardware biz with the x box already), but like Apple both will outsource to Taiwan or China anyway.
Amazon is and always will be a third tier player in this market. They make a big splash and say silly things like “The kindle is the #1 selling product Amazon has ever sold” - well OK, that’s because you can’t find 200,000 people who all buy the same other thing from you. It doesn’t mean you sold a lot of them in the grand scheme of things.
I am not a fan of Amazon for many reasons, but I won’t get into it now.
We bought one for typing a dissertation—it was wonderful. They were a victim of their own success thru marketing mistakes... they introduced the new model production schedule too soon, and people were waiting to buy it, so capital stream dried up...at least that is what I was told...
This is not a table; it’s a POS/cash machine in disguise.
This is not a tablet; it’s a POS/cash machine in disguise.
This is not a tablet; it’s a POS/cash machine in disguise.
We laugh, now. at those old clunky computers, but we were glad to have them ‘back when’. And-lets see if any of the new, Ipad type things are still functional 10-20 years from now. ( If they’re not all lost or destroyed from dropping!) I had an old 286, gave it to a friend years ago, and she reports it STILL WORKS FINE!
Built’em to last, they did!
That's weird. There's an Obama poster on the wall.
A closed system? No thanks.